As 2026 unfolds, organisations face a landscape that is more complex and more dynamic than ever. The Employment Rights Act (ERA) has raised the stakes in employee relations, requiring organisations to maintain compliance while safeguarding operational performance. Legal missteps carry financial and reputational risks, making workforce readiness and manager capability a strategic priority.
Yet, insights from our ‘Compliance cliff edge research’ highlight a significant preparedness gap. Manager capability is a top concern for HR teams. Many organisations are underinvesting in employee relations (ER) transformation (40%), which can leave managers unequipped to handle performance issues, grievances and employee relations issues confidently. To address this capability gap, organisations need to act now to empower their workforce.
Pressure on employee relations and HR compliance
Line managers face increasingly complex challenges, from performance management to rising absence rates, while HR has increased pressure to maintain consistent, legally sound policies and processes across dispersed teams.
The ERA intensifies this pressure, introducing stricter legal obligations and raising the potential consequences of mishandled employee relations cases. EPG research highlights the scale of organisational unpreparedness, including:
- Impact assessment: 1 in 6 (17%) have not initiated an impact assessment or are unsure if one exists.
- AI and employee grievances: 46% report that AI has increased the complexity of employee grievance processes.
- ER case management tools: Over 70% of organisations are still reliant on spreadsheets to manage employee relations cases.
These figures point to a gap between compliance requirements and practical manager capability. Explore the full research report for early insights, practical guidance and benchmarks to assess organisational readiness against peers.
Bridging capability gaps with systemic HR support
The scale of change arriving through the Employment Rights Act is a wake-up call for HR. This requires a new systematic HR operating model, which we call ER as a Service.
Early adoption of this approach – integrating digital guidance for ER cases, escalation triggers to HR for complex cases, targeted coaching and access to external HR advisers with legally privileged support – equips managers with practical tools, while giving HR teams clear visibility into trends and actionable insights to support data-driven decisions. Key elements include:
- Dedicated ER case management technology: Timely dashboards reveal trends, patterns and root causes of ER issues, enabling proactive interventions. Guided steps and coaching in handling ER cases also empowers managers in handling routine ER cases efficiently, freeing up HR to focus on strategic priorities.
- Embedded outsourced HR support and legal privilege: Managers gain access to expert HR advice when needed, while HR teams can rely on optional legally privileged support for more complex cases to reduce the risk of costly tribunals and ease internal workloads.
- Reinforce a culture of continuous development: Managers are the frontline defence against legal risk. Regular coaching, targeted eLearning and updates on legislative changes enable them to act confidently and consistently in line with the law.
Targeted resources, like our new eLearning courses on ‘Managing probation periods’, provide managers with actionable guidance to navigate the new unfair dismissal protections coming into effect in January 2027. Get in touch to find out more.
Impact on people and organisational performance
When managers are equipped with clear guidance and timely HR support, they become equipped navigate complex ER issues, deliver feedback effectively and guide performance improvement consistently – creating stronger clarity for their teams, reducing uncertainty and enhancing the overall employee experience.
Organisations adopting ER as a Service as a new operating model report measurable workforce improvements. Starbucks UK, for example, achieved a reduction of 10% absence rates in 12 months, which returned 15,000 more hours to frontline services. HRBPs were able to focus more time on strategic priorities, enhancing customer and employee experiences. Explore more case studies here.
Empowering managers is a key driver of performance, as managers equipped with dedicated tools and guidance build teams that are more engaged, proactive and resilient.
Workforce empowerment is a strategic advantage
In the era of the Employment Rights Act, empowering managers is a strategic lever for long-term success. Organisations need a proactive approach to maintaining compliance, and the key is equipping managers with practical tools, digital ER case management processes, external HR and legal support, and ongoing learning to create a workforce capable of embracing change with confidence.
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